World Cup Blamed For Bad PC Sales

Based on Gartner’s preliminary results, worldwide PC shipments declined 0.6 percent, and the World Cup soccer fever was one of the main causes for the slide in Asia, Japan and Latin America as consumers focused on the games instead of buying PCs.

In Japan, sales dropped 12 percent while Asia and Latin America showed single-digit growth rates of five percent and 4.3 percent respectively.

But there was a slight pick-up in China and the education sector is still quite promising, said Annie Chung, analyst at Gartner Hong Kong. “But demand from business and the government sector remains flat, though government spending has increased.”

Over in Hong Kong, Chung said that the market continued to be sluggish although there was a slight pick-up in terms of shipments during the last quarter.

She warned that a lack of confidence in the Hong Kong market has resulted in PC buyers spending more time looking for a bargain price PC.

Worldwide Sales
Worldwide PC shipments totaled 29.9 million units in the second quarter of 2002 (see Table 1).

PC shipments in the US reached 10.6 million units, representing a decline of 0.8 percent over the previous year (see Table 2).

“The market undoubtedly saw the effects of inventory overhang from the first quarter, but at the same time we have yet to see any significant return to corporate buying. In the consumer market, buying appears to have fallen back further in some regions,” said Charles Smulders, vice president of Gartner Dataquest’s Computing Platforms Worldwide group.

He added: “Economic uncertainty continued to undermine business confidence, which has been further compounded in the US by the Enron and WorldCom MCI accounting scandals.”

The combination of Hewlett-Packard (HP) and Compaq moved into first place in the worldwide rankings, just 0.6 of a percentage point higher than Dell.

While the new HP gained the No. 1 position in the quarter, it experienced a 16.1 per cent decline in shipments.

“HP’s decline is based on three factors: first, inventory adjustments being made during the integration process; second, its reliance on the weak performing US retail segment and third, business disruption as a result of the merger process,” said Smulders.

“We expect the third and fourth quarters to be a better measure of the success of the merger strategy.”

Dell was the only top five vendor, both worldwide and in the US, to experience double-digit growth in the second quarter.

Gartner Dataquest analysts pointed out that Dell continued to sharpen its efficiency, as it achieved 9.9 percent operating expenses of revenue during its fiscal year 2002, which ended May 3. It was the lowest operating expenses of revenue in Dell’s history as well as any other PC vendor.

“Vendors should plan for worldwide unit shipment growth to be approximately two percent to four percent in 2002, down from our previous estimate of five percent growth. Vendors must capitalize on DVD drive and graphics chip technology to draw consumers to their products in the fourth quarter,” Smulders said.


Table 1: Preliminary Worldwide PC Vendor Unit Shipment Estimates for 2Q02
(Thousands of Units)
Company 2Q02 Shipments 2Q02 Market Share (%) 2Q01 Shipments 2Q01 Market Share (%) Growth (%)
HP 4,627 15.5 5,517 18.3 -16.1
Dell 4,459 14.9 3,944 13.1 13.1
IBM 1,960 6.6 2,145 7.1 -8.6
NEC 1,045 3.5 1,147 3.8 -9
Toshiba 896 3 849 2.8 5.5
Sony 830 2.8 672 2.2 23.7
Others 16,079 53.8 15,807 52.5 1.7
Total Market 29,895 100 30,081 100 -0.6
Note: Data includes desk-based PCs, mobile PCs and IA32 servers. HP and Compaq are reported as one company.
Source: Gartner Dataquest (July 2002)




Table 2: Preliminary U.S. PC Vendor Unit Shipment Estimates for 2Q02
(Thousands of Units)
Company 2Q02 Shipments 2Q02 Market Share (%) 2Q01 Shipments 2Q01 Market Share (%) Growth (%)
Dell 2,925 27.7 2,526 23.7 15.8
HP 1,949 18.4 2,282 21.4 -14.6
IBM 663 6.3 646 6.1 2.6
Gateway 651 6.1 798 7.5 -18.4
Apple 456 4.3 461 4.3 -1.2
Others 3,933 37.1 3,948 37 0.3
Total Market 10,596 100 10,660 100 -0.8
Note: Data includes desk-based PCs, mobile PCs and IA32 servers. HP and Compaq are reported as one company.
Source: Gartner Dataquest (July 2002)


Reprinted from asia.internet.com, an internet.com site

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